Retrofitting is on the rise as property owners and developers invest in ensuring the UK’s homes and commercial buildings are fit for the future. Improving existing building stock is key to improving energy efficiency and meeting Net Zero goals. Taking a retrofit or renovation approach, rather than demolition and rebuild, is not only the most realistic option but also has a positive impact due to the embodied carbon which is saved through the building’s continued use and reuse, saving an estimated 30-50% of emissions and 40% of energy consumption compared to new build construction.
Faced with mounting energy costs, regulatory requirements for commercial lets, and the desire to contribute to a more sustainable future, many property owners and developers are keen to act. However, they face a number of blockers, with the upfront cost and the perceived risk of that investment being foremost.
In this article, we explore why the UK is in urgent need of a green retrofitting revolution, and why structural warranties can be a key tool in allaying financial reservations, ensuring that investing in making your property as energy efficient and sustainable as possible is feasible.
State of the nation’s homes
UK has the oldest homes in Europe: 76% of UK housing stock was built before 1980, and 1 in 5 are now over 100 years old. The average EPC of domestic housing in England is D, and for those built before 1930, 80% are rated in bands D to G. With energy bills unlikely to fall for several years, and increasing awareness of the need to improve energy efficiency, homeowners, landlords, housing associations and property developers are all looking at how buildings can be retrofitted.
Interest in green improvements is on the rise, 2023 saw record investment in solar panels and huge increases in awareness of the impact of improving insulation, as well as renewed discussions on how to scale the uptake of newer technologies such as ground source heat pumps. Yet despite the pressure of energy costs and awareness of options to improve sustainability, two-thirds of households did nothing to improve the energy efficiency of their homes in 2023, citing the prohibitive upfront costs.
Legislation driving investments in commercial green improvements
The need to retrofit isn’t just a challenge for residential property owners – commercial landlords are facing looming deadlines to improve energy efficiency. As of last year, the Minimum Energy Efficiency Standards (MEES) directive requires that to let a commercial property in England or Wales it is required to have a E rating. The government is consulting on plans to raise this to C by 2027, and B by 2030. Currently less than 10% of commercial property as an EPC rating above C, and research from Saville’s and Deloitte has highlighted landlords are unprepared for the current changes, let alone future developments.
While plans for mandated EPC minimums for the domestic rental market are currently on hold, this may be reintroduced. There is increasing awareness that legislated requirements – currently only in place for new builds, commercial lets and social housing – could be brought in for all properties and with an election looming this is adding to the uncertainty.
Across the country we have also seen shifting patterns of working, meaning some landlords may want to shift their property away from commercial use; or they are experiencing increased demand in their area and may be looking develop their property to allow for modernisation in line with new energy requirements and maximise the return on investing in retrofitting by increasing the rentable space. Changes to the Class MA Permitted Development Rights (PDR) from this year are offering building owner and developers an unprecedented opportunity to convert commercial buildings to residential or mixed use. There are also further changes under consultation to support widespread retrofitting adaptations. However, with only a 3-year window initially, there is a need to act on this quickly to seize the opportunity.
Challenges to overcome and the need for urgent action
Barriers to making much needed green updates to the UKs existing building stock include the cost of upfront investment, and concerns about the financial risk, as retrofit often includes new approaches and technologies. There are also shortages of construction companies with relevant experience, as well as worries about potential delays to work resulting from the ongoing widespread skills shortage.
In January 2024, the UK government published a review of barriers to adapting historic homes for energy efficiency – reflecting how concerned they are about the range of blockers that are preventing the vital acceleration of retrofitting homes, social housing and domestic rental and highlighting the urgency of solving them and increasing confidence in undertaking this work.
Government and energy company support schemes are vital, but limits on funding available mean they are targeted to help specific groups and often home and property owners find they do not qualify. While there have been several promising announcements for future support for domestic properties, understanding and accessing them is generally seen as difficult and when they will come into effect can be uncertain. For commercial properties, the access to public funding and support is even more limited.
Learn more about some of these schemes in our previous article on insulation and energy savings.
Where to find expert guidance on retrofitting your property for energy efficiency and sustainability
Many property owners and developers may be interested in investing in retrofitting their building, but not know how best to proceed. Unlike the new build market, with existing properties each retrofit is slightly different and may require a bespoke approach. There are also a wide number of technologies and solutions on offer, and it can be a challenge to know where to start, and which improvements are worth investing in.
Here there is good news, as guidance from forward thinking industry bodies is available and a key help to commercial and domestic property owners and developers. For homeowners and all domestic properties, whole house deep retrofit is recommended by experts including RIBA, UK Green Building Council and CIBSE. For commercial properties, bodies such as RICS and the publications of industry best practice such as PAS2038:2021 Retrofitting non-domestic buildings, are available to guide those property owners looking to invest in retrofitting, and meeting or exceeding requirements.
What both best practices have in common is recognising that a holistic approach is vital to achieve the desired efficiency outcomes to future proof your building, and the long-term energy savings that result in a return on investment. In addition, unlike small stop-gap measures such as loft insulation, retrofitting for maximum sustainable impact, and perhaps extending the building or converting the use, often requires structural changes.
BuildSafe can help property owners confidently take the next step to begin their retrofit
For retrofits which require structural changes, warranties have emerged as a strategic tool in allaying financial reservations and make investing in green property improvements feasible.
For residential properties, having the correct structural warranty in place not only provides reassurance to property owners and developers, but it is also vital for lenders and gives future buyers peace of mind that any construction that has undergone a green retrofit is a safe investment.
For commercial properties, a commercial warranty protects owners and developers of commercial sites against structural defects and provides surety that if issues arise there will be cover for loss of income, as well as offering reassurance to potential buyers.
The team at BuildSafe work with our clients to deliver tailored solutions that provide security and peace of mind, meaning that you can retrofit your property to ensure it is fit for the future and meets or exceeds new requirements.
Get in touch with our team today to discuss your next project.
